Dollar struggles to find demand ahead of key data releases, Fed likely to cut interest rates next week

The U.S. dollar (USD) continued to be on the back foot early Wednesday, after closing in negative territory on Monday and Tuesday. Later in the day, automated data processing of private sector employment data and the Institute for Supply Management's (ISM) Services Purchasing Managers' Index (PMI) report for November will be included in the U.S. economic calendar.

The dollar is struggling to find demand amid growing expectations for a dovish outlook from the Federal Reserve after U.S. President Donald Trump hinted at plans to nominate chief economic adviser Kevin Hassett next year to replace outgoing Fed Chairman Jerome Powell. In early European trading on Wednesday, the U.S. dollar index fell slightly to 99.00. At the same time, mid-term market sentiment was relatively upbeat, with U.S. stock index futures rising 0.2% to 0.3%.

As for the Russia-Ukraine peace negotiations, the BBC quoted a consultant who attended the meeting as saying that the talks between Russian President Vladimir Putin and US Special Envoy Steve Vitkov were "constructive", but "there is still more work to be done." Additionally, Kremlin aide Yuri Ushakov said Ukraine had "not reached any www.xmasseuse.compromise" on territorial concessions.

Basic market trends in the foreign exchange market:

Australian data earlier in the day showed that gross domestic product (GDP) grew at an annual rate of 2.1% in the third quarter. The figure followed a 1.8% increase in the second quarter and was slightly below market expectations of 2.2%. AUD/USD maintained bullish momentum early on Wednesday, trading to its highest levels since late October, above 0.6580.

EUR/USD built on this week’s gains, rising to 1.1650 in European morning.Later in the trading day, Eurostat will release October producer price index (PPI) data. In addition, European Central Bank President Christine Lagarde will speak at a hearing of the Economic and Monetary Affairs www.xmasseuse.committee (ECON) of the European Parliament in Brussels, Belgium.

GBP/USD struggled to capitalize on the overall weakness in the US dollar, with slight losses on Monday and Tuesday. The pair held its ground during the European morning and moved back towards 1.3250.

The dollar rebounded against the yen on Tuesday following Monday's losses, with risk-positive market sentiment weighing on the safe-haven Japanese yen (JPY). On Wednesday morning in Europe, the pair traded sideways in a narrow channel above 155.70.

Bulk market fundamentals:

Oil prices rebounded after falling in the previous trading day. While the market is weighing the prospects for peace between Russia and Ukraine, it is also worried about oversupply. Brent crude futures rose 0.11% to $62.52 a barrel, while U.S. crude rose 0.14% to $58.72 a barrel. Spot gold was unchanged at $4,206.89.

Analysis of major currency trends:

Euro: EUR/USD rose slightly today, but is still below the 1.1655 resistance level. The intraday bias remains neutral. On the upside, a decisive breakthrough of 1.1655 will www.xmasseuse.complete the top and is expected to form a bottom pattern (LS: 1.1540, h: 1.1467, rs: 1.1490). This would say that the entire decline from 1.1917 has been www.xmasseuse.completed as a correction. This should be followed by further gains towards the 1.1727 resistance first. However, below 1.1554, the downward direction of the 1.1490 support will first change.

GBP: GBP/USD rebounded after finding support from the 554 hour EMA (now 1.3191), with the intraday bias turning neutral again. On the downside, a break below the temporary low of 1.3178 will lead to further declines and a retest of the 1.3008 low. However, continued trading above the 55D moving EMA (now 1.3263) should confirm that the decline from 1.3787 is over. Further gains should follow towards the 1.3725/3787 resistance zone.

JPY: USD/JPY remains neutral intraday. With the recent channel rising bottom remaining intact, further gains are expected. If there is small resistance above 156.57, it will test 157.88 again. A further breakout would resume the overall rebound from 139.87. Next target is structural resistance at 158.86, followed by the high of 161.94. However, a sustained break below channel support will bring a deeper correction to the 55-day moving average (now 153.06), adding to the short-term trendPossibility of reversal.

The above content is about "[XM Foreign Exchange Market Analysis]: The US dollar is difficult to find demand before the release of key data, the Federal Reserve may cut interest rates next week". It is carefully www.xmasseuse.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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